RPSM03101610 - Technical Pages: Protecting pension rights from tax charges: Valuing pension rights at 5 April 2006: Crystallised retained benefits

Retirement benefits scheme limit (paragraph 9 Schedule 36 FA 2004): valuation of crystallised retained benefits

Retained benefits which are crystallised pension rights on 5 April 2006

For individuals whose retained benefits must be valued (see RPSM03101590) the value is either

• the annual amount of the pension in payment on 5 April 2006, or
• the annual amount of the pension when it first came into payment.

If the pension is being paid under drawdown, the amount of the pension to be valued should be the maximum annual amount that could be paid.

Retained benefits which are crystallised lump sum rights

For individuals whose retained benefits must be valued (see RPSM03101590), the amount of the lump sum benefit paid should be turned into an annual pension amount either by dividing it by 20 or by an annuity rate calculated from the GAD tables on 5 April 2006.